Cell signaling mediated by the Hedgehog (Hh) family of secreted proteins plays crucial roles in animal development and human diseases. The Hh pathway is operating in a similar way among organisms ranging from insects to human. Drosophila has been a powerful model organism to study Hh signaling mechanisms, as sophisticated genetic, molecular, and biochemical tools are available to dissect this important pathway in whole organisms as well as in cultured cells. The long-term goal of my laboratory is to delineate the complex regulatory network that governs Hh signal transduction. The focus of this proposal is to investigate the multifaceted regulatory mechanisms that control the transcriptional effectors of the Hh pathway, Ci/Gli proteins. Our previous studies identified three kinases, PKA, GSK3, and CKI, and an ubiquitin ligase consisting of the F-box protein Slimb/(3TRCP, as essential regulators of Ci proteolytic processing to generate its repressor form. We provided evidence that the kinesin-like protein Cos2 acts as a scaffold to bridge Ci to its kinases for efficient phosphorylation. In addition, we showed that the formation of multiple Ci/Cos2/Fu/Sufu protein complexes impedes Ci nuclear translocation and that Sufu further inhibits Ci activity in the nucleus. More recently, we identified an ubiquitin ligase consisting of the BTB protein HIB, which acts in a negative feedback loop to fine-tune Hh signaling responses by degrading the active forms of Ci. Interestingly, HIB is specifically expressed posterior to the morphogenetic furrow in eye discs where it prevents aberrant Hh signaling activity to ensure normal eye development. Several important questions remain regarding how Ci/Gli proteins are regulated. For example, how does Sufu inhibit Ci transcriptional activity in the nucleus? Does Cos2 have additional scaffolding role? How does Hh signaling inhibit the scaffolding activity of Cos2? What are the degrons that mediate HIB degradation of Ci/Gli? Does HIB participate in other aspects of Ci regulation? What are the other mechanisms that regulate Hh/Ci signaling in tissue-specific manners? We will address these questions by proposing the following specific aims: 1) to further define the scaffolding role of Cos2 in Ci regulation; 2) to investigate the mechanism by which Sufu regulates Ci transcriptional activity in the nucleus; 3) to define the mechanisms by which HIB regulates Ci degradation and subcellular localization; 4) to identify and characterize novel tissue specific regulators of Hh/Ci signaling. The proposed study should provide novel insights into how the Hh signal is transduced at the level of transcriptional effector and how Hh signaling responses are modulated by conserved mechanisms that interfere with Ci/Gli activity. As unconstrained Gli activity contributes many types of human malignancy, including brain, lung, pancreas, and prostate cancers, our study may provide new avenues for improving diagnosis and therapeutics of these devastated human diseases. [unreadable] [unreadable] [unreadable]